Hydrogen Energy Is Getting A Heavy Infusion Of VC Funding

Startups tied to the planet’s lightest element are seeing some heavy funding lately.

Over the past four months, developers of technology to produce and distribute low-emission hydrogen have raised more than $1 billion in venture investment, per Crunchbase data. That’s already more than two-thirds the total raised in all of last year.

The tally includes multiple extra-large early-stage rounds. The latest was last week’s Series B for Hysata, which picked up $110 million in a financing co-led by BP Ventures and Templewater.

The Australia-based company is one of several recently funded startups working on electrolyzers, devices that use electricity to split water into hydrogen and oxygen.

A few months earlier, Denver-based Koloma, which focuses on identifying and commercializing geologic hydrogen resources, closed on the largest early-stage round for the space, landing $246 million in a Series B led by Khosla Ventures.

Five-year track record

The bevy of big deals means hydrogen energy is one of the few areas where startup investment did not peak in 2021. As illustrated in the chart below, funding hit a high point in 2022, but looks poised to go even higher this year.

Largest rounds

So who’s getting funded? We used Crunchbase data to curate a list of 13 well-funded startups in the hydrogen energy space that last raised funding in recent quarters.

Altogether, companies on our list have raised $3.66 billion in equity funding to date, plus hundreds of millions more in grant and debt financing. Beyond Hysata and Koloma, other standouts include:

Electric Hydrogen, which is manufacturing electrolyzers that it says are capable of producing hydrogen at the lowest cost available, has been called the green hydrogen industry’s first unicorn. The Massachusetts company raised $380 million in an October Series C from a mix of venture and strategic backers.
HysetCo, an operator of a network of hydrogen distribution stations and mobility services, secured $216 million in an April round led by hydrogen investor Hy24. France-based HysetCo said at the time that it was distributing nearly 30 tons of hydrogen to customers every month and managing a fleet of more than 500 hydrogen vehicles.
Tree Energy Solutions, based in Brussels, closed on $150 million in an April Series C to expand its business model of using renewable energy to generate green hydrogen. Tree Energy then combines the hydrogen with recycled CO₂ to create e-NG, or electric natural gas.
ZeroAvia, a developer of hydrogen-electric engines for zero-emission flight, snagged $116 million in a September Series C. The Hollister, California-based company counts Airbus as a lead investor, and is also backed by United Airlines and Alaska Air Group.

Hydrogen’s moment

While green hydrogen is by no means a new concept, investors’ stepped-up interest in the space indicates they see the requisite combination of government incentives, tech-enabled cost reductions, and market receptiveness in place now to produce compelling outcomes.

As we’ve long seen in the startup game, timing is among the most crucial determinants of success. For low-emissions hydrogen, it looks like that moment may be upon us.